Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/30877
Authors: 
Maßbaum, Alexandra
Sureth, Caren
Year of Publication: 
2008
Series/Report no.: 
Arqus-Diskussionsbeiträge zur quantitativen Steuerlehre 39
Abstract: 
From a tax planner's point of view, it is often attractive to choose debt over equity financing. As this has led to an increase of debt financing of corporations, many countries have introduced thin capitalization rules to secure their tax revenues. We analyze the influence of section 8a of the German Corporate Tax Code on corporate capital structure decisions. Furthermore, the impact of the new interest barrier is taken into consideration. The existence of the Miller equilibrium as well as definite financing effects depend significantly on the fraction of long-term debt, of substantial shareholders and when capital gains are realized.
Subjects: 
business taxation
capital structure
interest barrier
Miller equilibrium
share holder financing
thin capitalization rules
JEL: 
H25
H21
G32
Document Type: 
Working Paper

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